Trade tirade hits Harley and Midwest
Hogs — as in Harley-Davidson motorcycles — are fleeing the United States, while Wisconsin dairy cows are crossing their legs in anticipation of distress. This is what President Donald Trump’s trade war mentality looks like: lots of short-term pain for Midwestern industries.
On Monday, Milwaukeebased Harley said it would shift production of motorcycles for the European market from U.S. to overseas plants to escape the pain of retaliatory tariffs. The European Union raised tariffs on Harleys from 6 percent to 31 percent in response to Trump administration tariffs on foreign steel and aluminum. That would increase the cost of every bike sold in Europe by an average of $2,200.
Wisconsin dairy farmers and cheesemakers, too, are feeling pinched by retaliatory tariffs, these imposed by Mexico as a ripple effect of a steel and aluminum fight. The dairy industry also is vulnerable to attempts by European countries to steal its customers as Trump wages trade battles. The Europeans want to cut deals with dairy-importing nations decreeing that only salty goat’s milk cheese exported from Greece can be marketed as “feta,” or only hard cheese from Parma, Italy, could be marketed as “parmesan.”
Our view is that free and undisrupted trade, not protectionism, is the path to greater prosperity for Americans. The global economy is here to stay, creating an enormous, growing market for U.S. goods. American consumers and businesses benefit from gaining access to the best and least-expensive exports from abroad. It’s a classic win-win.
But Trump’s skeptical. His first impulse is to kill trade agreements, which is what he did with the Trans-Pacific Partnership. He’s also threatened to leave NAFTA. The fight over steel and aluminum is causing the biggest ruckus because it has incited China to threaten retaliation — at potential great cost to Midwest manufacturers and farmers. Trump says he is trying to fix unfair trade deals that destroy American jobs, but his attempts to bully foreign countries have invited retribution. China’s targets include soybeans, which are grown in Illinois and Ohio and shipped down the Mississippi for export to Asia.
Trump ran for president claiming he could save existing jobs at U.S. factories. But it was always more a sales pitch than a strategy, exemplified by the fact that he ignored details of the fast-moving, interdependent nature of the global economy. The president has called out foreign automakers for scorn without acknowledging that companies like BMW and Toyota produce many of their vehicles in the U.S., while Ford and GM have assembly lines in Mexico.
One more point, about an industry we know well: The Trump administration has slapped costly tariffs on Canadian newsprint in order to protect one U.S. paper producer. That decision is costing U.S. newspaper publishers millions of dollars. It’s another example of the president’s literal-minded take on a dynamic issue.
Trade deals should be fair and disagreements are inevitable. We hope all these conflicts can be sorted out. But there should be no turning from globalization. The benefits are too great, and the U.S., as the richest, most flexible economy in the world, is in a position to win. Why does the president seem afraid to compete?